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Brent Paris found that the appellants received a taxable benefit within the meaning of the section of the act because they had a right to a parking spot because they worked at the school, the benefit to them was not incidental and they saved money because they were given a parking spot. "Often the case of whether there is a taxable benefit is closely tied to the question of valuation," says Jacques Bernier, of Baker & McKenzie LLP who is representing the employees in the case. They took issue with the finding of a taxable benefit arguing there was no economic benefit to them. They also argue their case is not like Schroter, in which a corporate executive was rewarded with a free parking pass at his downtown office tower upon his promotion. "I'm sure it's going to be part of the discus- sion again, no doubt," says Bernier. If the parking at Branksome Hall is determined to be a tax- able benefit, the appellants argue the value should be computed on the basis of the employer's cost of providing the parking. Tax experts have varying views of the case, but one of the main arguments is whether free parking is a financial benefit to those who receive it. "It's pretty difficult to argue there is no eco- nomic advantage," says Vern Krishna, a University of Ottawa tax law professor. "Would you rather get free parking or pay for it?" Krishna says there are three questions to be considered in a case such as this. First, is it a benefit, and second, how much is the benefit worth? The third question is what is the net cost of the benefit? "Yes, of course, in common parlance we talk about the fact free parking is nice, as opposed to paid parking. There is an economic advantage, there's no doubt, but the essential question is for whose benefit? Is it for the benefit of the employer or the benefit of the employee? With parking, unless in very unusual circumstances, it's usually provided for the benefit of the employee, I suspect," says Krishna. In certain cases, providing free parking could be something employers offer to be more attractive to prospective employees. If an employer is located in a remote location where public transportation is not easily accessible, and people have to drive and park, it is a situation where it is of benefit to the employer. Then there is the question of value in the marketplace and the net cost of the benefit. "At the end of the day if it's a taxable ben- efit the net cost to the employee is only the tax rate divided by the benefit. So if the benefit is worth $100 and you pay tax at 40 per cent it's going to cost you $40, but you're getting something worth $100 you would pay for in the marketplace, so you come out ahead anyway," says Krishna. The reality is that the Canada Revenue Agency is looking at employee benefits more closely, says Bernier. "I think CRA has announced publicly it will scrutinize taxable benefits more and more and parking was at the top of their list." The reason is very simple — the dollar cost to the national treasury can be very high. "They go on a binge from time to time and this one has been percolating for some time," says Krishna. The individual benefit to the employee may be small, but given the millions of taxpayers who are involved, the total costs escalate quite rapidly so I suspect they are looking at all sorts of areas where they get these taxable benefits." ntitled-1 1 The Toronto Police force learned last year the taxman would be forcing them to pay for parking at their stations after a compli- ance audit was conducted by the CRA, which ruled their parking spots were a taxable benefit. Some 1,700 City of Toronto employ- ees were also ordered to pay for their parking last May. The city had to dish out $8 million to compensate those who were facing bills for back taxes on parking privileges deemed a taxable bene- fit. The city said the CRA changed the rules governing "scramble" parking — where there are fewer spaces than employees with parking privileges. The city says the rule is now being interpreted to mean that parking is taxable if the lot is a "fixed, controlled" setting, such as an enclosed lot with a pass-operated gate. According to the CRA, employer-provided parking is usually a taxable benefit for an employee, whether or not the employer owns the lot. The amount of the benefit is based on the fair market value of the parking, minus any payment the employee makes to use the space. Some exceptions do apply. For example, if a business operates from a shopping centre or industrial park where parking is available to both employees and other people. Or, if an employer provides "scramble parking" — a situation where there are fewer spaces than there are employees who want parking and the spaces are available on a first-come, first-served basis. If the employee has a disability, the parking benefit is generally not taxable. There is no taxable benefit for employees when both of these conditions are met: parking is provided to employees for business SR&ED a Value-Added Service for Law Firms One of the services that several prominent law firms are examining is the Scientific Research & Experimental Development (SR&ED) program. SR&ED is a high value-added service for law firm clients that can assist with new business development and client retention. As the SR&ED service sector is growing at a rapid pace, there is a current void in the market for SR&ED tax law expertise. 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